Chancellor Plans Stamp Duty Cut For Struggling First-Time Buyers

A cut in stamp duty for first-time buyers, reportedly being considered for next month’s Budget, could help young people get on the property ladder and reverse falling revenues at London-only estate agent Foxtons.

Total revenue for the year so far also fell, from £106.3 million to £93.7 million.

Foxtons’ last set of full year results, announced in March, showed its annual profits fell by 54% year-on-year, driven by London’s stagnant housing market, Brexit uncertainty and the hike in stamp duty in April 2016.

London’s property weakness is weighing on FoxtonsSource: Wikimedia

But there are fears that without an increase in new homes, a stamp duty cut could backfire by driving up prices.

A stamp duty holiday was used by John Major to revive the market in 1992 and big cuts for young families were advocated by the Tories and picked up by Gordon Brown in 2005.

Treasury studies have cast doubt on the benefits of cuts unless supply is also boosted.

Tory former minister David Willetts told BBC Radio 4’s Today programme: “If you are 30 now you are probably earning less than someone who was aged 30 10 years ago. Anything that rebalances and helps young people, I’d be in favour of.”

But he said tight public finances meant taxes would have to rise on older people if the young received help: “Any help you give to one part of the population does have to be offset by increases on others.”

There aren’t enough affordable homes being builtSource: Flickr

DealMakerz thinks a cut in stamp duty for first-time buyers would be the right decision and help to restore a measure of equality between the old and young.

Stamp duty has soared to eye-watering figures in recent years as house prices have spiralled.

It is a huge barrier for first-time buyers, particularly those in the capital, who already struggle to raise enough money for a deposit.

There’s a worry that house prices could rise even further if interest rates are increased in the coming months.